Performing a Chi Square Example: GWC USA

GWC USA is a valve manufacturing company that is based out of Milan, Italy and Bakersfield, United States. Many of their forecasts are based on simple marketing research calculations such as Chi Squares. To understand the significance of most value predictions, most companies perform a Chi2. The Chi2 allows people to determine if there was a significant or large difference (distribution of a sum of the squares of k) between the results most expected (before a marketing campaign) and the results companies observe (end of a marketing campaign). Usually, the sample data of what was expected should represent the reality of the population.

Here’s an example of a Chi Squared used for a performed on a marketing campaign in Montreal. GWC USA approves of their simplistic approach:

“To establish a goal (expectation) for the start-up business’ collaboration with our campaign efforts, they requested we aim for 20 sign-ups. We countered with 25 to impress the client. As a result, Bin Kings’ (20 sign-ups) Chi2 expectation was 8.45 while ours (25 sign-ups) was 2.56. Together, those expectation with an observed 33 sign-ups during our campaign resulted in a 11.01 Chi2 test result with a degree of freedom being 1. The two-tailed P value equals 0.0009. By conventional criteria, this difference is considered extremely significant.”

For more information on marketing research calculations that GWC USA uses for their projections, contact them using the link provided above.